Ed Balls Tells Alex Salmond: Scotland Must Vote No Independence to Keep Sterling

An independent Scotland would not be able to keep the British pound sterling under a Labour government in Westminster, the shadow chancellor Ed Balls has suggested.

Alex Salmond, leader of the Scottish National Party (SNP) who is pushing for independence, wants to keep sterling and the Bank of England if Scotland votes to split from the UK in the September 2014 referendum.

But Bank of England governor Mark Carney warned that a currency union would mean an independent Scotland losing some of the sovereignty it seeks because it would need fiscal integration with the rest of the UK.

The Treasury also poured cold water on Salmond's desire to keep the pound, saying that an agreement on fiscal matters would be very unlikely.

"The governor of the Bank of England's important speech is a wake-up call to those who want to avoid discussing what the economic consequences of breaking up the UK would be for Scotland," Balls will say in an East Ayrshire speech.

"The governor was clear that the eurozone showed that currency union without fiscal union won't work. But the SNP immediately rejected fiscal union. Alex Salmond's rejection of the key test set by the governor of the Bank of England makes an already flawed proposal even more unworkable.

"Alex Salmond cannot continue to casually claim that Scotland could keep the pound. He simply cannot make that promise because it would take both sides to agree. The only way to guarantee the pound is to stay in the UK."

Balls is also asking what Salmond's alternative plan to the pound would be.

"Does he want Scotland to join the euro or to create a new separate currency for Scotland? He cannot run away from the difficult questions any longer. The people of Scotland need to be told," Labour's Balls will say.